President Barack Obama may be dropping – or at least softening – his administration’s demand that Israel freeze settlement growth in the West Bank as a precondition to starting peace negotiations with the Palestinians.

That would mark a stark change for the administration, which had pressed Israel to declare a full freeze to all settlement growth in the West Bank to jumpstart Israeli-Palestinian peace talks.

Abandoning the terminology the US has been using in months of urging a halt to growth in the Israeli outposts on land claimed by Palestinians, Obama Tuesday referred to “restraining” settlement activity, rather than freezing it.

"Obama told Abbas that he couldn't get the settlement freeze and promised to keep trying, but that it shouldn't be a condition for talks and it was time to move on," one Palestinian aide to Abbas said.

Several U.S. officials said that Obama told Abbas that although the U.S. believe a settlement freeze would create a better atmosphere for talks to begin, the lack of one should not be used an as excuse not to talk.

"Let's not have the perfect be the enemy of the good," Obama told Abbas, according to the officials.

Administration officials insisted later that the U.S. position on Jewish settlements had not changed. But the shift in language was widely interpreted by Palestinians and Israelis as a sign the Obama administration was jettisoning a U.S. stance that had alienated many Israelis and their U.S. supporters.

About 300,000 Israeli settlers now live in 121 settlements in the West Bank, which Israel has occupied since the 1967 war and where Palestinians hope to establish their future state. (Read the Christian Science Monitor’s briefing on where, when, and why Israeli settlements are built.)

It is unclear where this move leaves the possible peace negotiations. Mr. Abbas has so far refused to begin negotiations with Israel until it declares a full halt to the growth of the outposts. According to the conservative Israeli newspaper The Jerusalem Post, Netanyahu told Israeli reporters after the meeting that Abbas had dropped preconditions for the talks, and discussions were now focused on the framework of negotiations.

Obama had hoped to be able to announce a breakthrough in negotiations by now. Instead, he had to make do with the first meeting between Israeli and Palestinian leaders in a year. Reuters reports that the US and Israel may be pushing for entering full-blown negotiations before resolving the settlement issue.

"They are trying to finesse settlements now," said [Daniel Kurtzer], a former U.S. ambassador to Israel. "Having been unable to reach an agreement to freeze settlements in a meaningful way, they are going to leave it out there as a disagreement between us but not as a road block or an impediment to negotiations."

After the meeting Tuesday, Obama expressed determination to move forward, saying, “It is absolutely critical that we get this issue resolved," the Monitor reported.

He ... directed top foreign policy aides, including Secretary of State Hillary Rodham Clinton and special Mideast envoy George Mitchell, to continue the intense contacts with Israeli and Palestinian officials the US has pursued since Obama took office.